City Journal Winter 2016

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Winter 2016
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By Nicole Gelinas

After The Fall: Saving Capitalism From Wall Street--and Washington

Eye on the News

Nicole Gelinas
The Crumbling of America
Our precious infrastructure inheritance and how we’re squandering it
August 3, 2007

It’s not clear why a major section of the nation’s interstate highway system collapsed Wednesday night over the Mississippi River in Minnesota, causing a still unknown number of fatalities and indefinitely severing an important transportation link. But one thing has been all too clear for decades: America is neglecting its vital physical infrastructure, and the bill is coming due.

As a nation, we’ve long borrowed from our future; everybody knows about the inevitable Social Security and Medicare crises that will happen in the next three decades as the number of retirees expands in relation to the number of workers. Far fewer people understand that we’ve also been borrowing from our past. The federal highway system, the backbone of America’s modern economy, turned 50 last year. But, as I wrote in Forbes magazine in April, we haven’t spent enough, or thought enough, to keep it—and other physical assets that previous generations built—in good working order. We spend only 60 percent of what’s needed to keep roads in good condition, according to the American Society of Civil Engineers. In New York State, for instance, 35 percent of major roads are in “poor or mediocre condition,” the ASCE says, while 38 percent of bridges are “structurally deficient or functionally obsolete.”

Even where they’re safe enough, transportation assets suffer from obsolescence, as traffic and vehicle weights increase annually while road spending lags. Rush hour on Northeast and West Coast freeways goes on all day and half the night. And it’s not just roads and highways; mass-transit assets in major cities have deteriorated, too. The ASCE gave the nation’s infrastructure—including airports, bridges, dams, water and wastewater systems, rails, and roads—a grade of “D” two years ago, warning that “with each passing day, aging or overburdened infrastructure threatens America’s economy and our quality of life.” New Orleans residents found that out when Hurricane Katrina hit in 2005 and the levees broke, allowing water to inundate the city.

It’s easy to see how this happened. If the fifties were the decade of infrastructure, the sixties were the decade of entitlements and social services—and the sixties haven’t ended. Just five years ago, a Republican Congress scrambled to add a huge new prescription-drug benefit to the 1965 Medicare program. Even when we do spend money on infrastructure, it often suffers from confusion of purpose. Congress treats federal transportation bills as opportunities for political earmarks, rather than for rational growth. And states see infrastructure projects as ways to funnel money to politically favored contractors and powerful construction unions, rather than as worthwhile undertakings to be done as efficiently and effectively as possible.

At the state level, Medicaid spending dwarfs infrastructure spending, and most governors don’t sound the alarm. One exception is California governor Arnold Schwarzenegger, who expressed grave concern about his own state’s levees in the months after Katrina, and who won voter approval last year to float tens of billions in bonds to fund infrastructure upgrades. But Schwarzenegger and California’s legislature don’t want to cut back on anything else to pay for that investment, preferring both bridges and butter—and that’s not sustainable for long.

The problem isn’t just the possibility of future disasters. To understand the true scope of what we’re facing, think about that other boring problem that nobody likes to worry about: our unfunded obligations to Social Security and Medicare, incurred by borrowing from the future for so long. Many independent experts say that even with robust economic and productivity growth, America simply cannot grow its way out of these entitlement-program problems.

We’ll see. But we definitely can’t grow our way out if our economy—during the very years when it must generate enough tax revenue to fund benefits for retiring baby boomers—is straitjacketed by failing, outdated physical infrastructure. Our future obligations continue to grow while the assets that we have—gifts from the past—deteriorate. Every year that we refuse to confront the problem, we fall farther behind.

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